Liveris: Higher earnings for investors

Published 9:09 am, Tuesday, October 4, 2011

NEW YORK — Leaders at The Dow Chemical Co. will deliver higher earnings for its investors. No stagnant markets or threat of global recession can stop the company from achieving its short-term earnings goal, Dow Chairman and CEO Andrew Liveris told investors here on Tuesday.

“We’re going to get to our earnings target no matter what the world throws at us,” he said.

The near-term target is $10 billion before interest, taxes and other factors are excluded.

“When we encounter volatility that takes us off the trajectory of these earnings road maps, we respond,” Liveris said. “That’s what you’ve seen from us, and that’s what you’re going to see going forward.”

Liveris spoke at the 2011 Dow Investor Day event, which the company organizes each year to share its success stories and set a vision for the future of the company.

Investors gathered in the unique IAC Building in Manhattan’s Chelsea neighborhood.

The building’s futuristic exterior and video projection walls seemed to fit the spirit of innovation that’s been revived in Dow in the past few years.

Dow’s stock has struggled in recent months, slipping from over $40 earlier this year to around $21.50 on Tuesday. Analysts have shared concerns that slowing economic indicators could spell trouble for Dow’s earnings potential.

Liveris said the company is the same now as when the stock was valued at $40.

Liveris outlined a plan for growth focused on innovation, aligning the company’s portfolio of businesses with key locations and end-markets, finding low-cost feedstocks and the company’s new “Efficiency for Growth” program that looks at productivity, profitability and reliability.

The new program is expected to provide $450 million in cash savings by 2012 and has a cash flow potential of more than $2 billion by 2015, Liveris said.

These factors help him confidently say he can deliver on expectations for higher earnings.

With a stronger company that has turned around since its delayed purchase of Rohm and Haas Co. in 2009, the expectation for returns to shareholders through dividends has grown. Liveris said the Dow Board of Directors is aware of this, and earlier this year raised the dividend from 15 cents per quarter to 25 cents.

No further increase has been announced, but the issue of sharing profits with shareholders is one that the board looks at on a continual basis, Liveris said.

That, along with paying down debt and investing for growth, will be the company’s only use of cash in the near-term, Liveris said.